Ted Grant

Campbell somersaults — The Communist Party and the Slump

Following on the heels
of the capitalist economists, who have expressed fear as to economic
developments in Britain and the world, the Daily
Worker has begun a campaign on the question of the slump (January 4th).

Even here, the
diseased state of mind of the leadership of the C.P., poisoned by Stalinism, is
shown in the headline: “Can Britain Dodge the U.S. Slump?” Again, in the body
of the article, this constant harping on the “American” responsibility for
British ills is accentuated. “The American Slump is here. Will it affect
Britain, as did a similar slump in 1949-50, leading, among other things, to a
balance of payments crisis in Britain, to the devaluation of the pound?”

In keeping with the
C.P. “line” of the moment, or rather, in consonance with Russian foreign
policy, all the ills of British capitalism are to be laid at the door of the
sinister Americans. Such an attitude, apart from being anti-internationalist,
is entirely unscientific from the viewpoint of Marxian economics. Slumps start
usually in America (though not always) ‑ not because the Americans are more wicked
or stupid than the British, French, or German capitalists, but because American
capitalism is the most developed and most dynamic in the world, and
consequently the economic laws show themselves there more speedily. Similarly,
in the 19th century, slumps usually began in Britain, because of
Britain’s primacy as an industrial power.

This vulgar
anti-American smear is an indication of the general tone of the article, which
is written not to clarify and raise the level of understanding of the working class,
but purely to confuse them in the interests of Russian foreign policy. J. R.
Campbell, leading light of the Communist Party’s economic committee, says: “If
Britain is threatened by a slump spreading from the U.S., is it not damned
silly artificially to create a slump, as the Government is doing by its high
interest rates and credit squeeze?” Is it not damned silly artificially to
pretend that slumps and booms are created or can be prevented by capitalist
governments and not by the laws of development of capitalist economy itself? It
is true that this or that measure might delay or precipitate a slump, but in
general tinkering with the economic
system only makes the crisis worse.

Campbell follows Strachey

It is true that the
interests of the City of London and of industry sometimes clash, and one or the
other is victorious. However, on this question of the bank rate and the credit
squeeze, Big Business and the City are at one, because the interests of British
capitalism as a whole are threatened. From a capitalist point of view, the
enormous inflation engendered by the arms drive threatens to assume runaway
proportions. At the same time, by creating a false market temporarily at home,
the whole position of British capitalism would be undermined by “unsound
finance” and precipitate an even worse crisis of deflation at a later stage.

Only recently the C.P.
leaders crossed swords with John Strachey and other Labour economists, putting
forward Keynesian ideas. Now Campbell cynically repeats the errors that he
previously castigated. In The New
Statesman of January 11th, Thomas Balogh, the foremost economist
of the Labour Party, writes on similar lines.

“It all
recalls the nightmare world of the late twenties, when the slump of 1929 was
created equally artificially. Then, as now, the Bank of England, with the
consent of the Treasury and in co-operation with the Americans, tried to deal
with a specific problem…at that time stock exchange speculation…by a general
restriction of credit. In 1929 they had succeeded in causing a general collapse
leading directly to Hitler’s victory in Germany and ultimately to war. Such an
ill-starred triumph is unlikely now! Prices and wages are still on the increase
and the restrictive policy will probably be frustrated by the increase in
armaments. But if the bankers had their way, they would once more plunge us
into depression because of their obsessive hostility to direct controls and
their reluctance to co-operate with the trade unions in hammering out a
conscious wage policy with all that that implies in terms of social policy and
taxation.”

Campbell and Balogh
are at one. The only difference is that Balogh is honestly mistaken. Campbell,
with his erstwhile Marxist training, knows better, and would not dare to argue
that the last slump was caused by
these policies. An example of this is provided in the Economic Bulletin of the Communist Party, published by the Party’s
Economic Committee (November, 1957). On page 25, Campbell writes: “How far can
the state fix the level of interest? This is an important question to us, but
it would seem that the rate must be related to general activity and can only
operate within narrow limits.”

Marx explains in
Volume III of Capital, that the
development of credit has the result of extending capitalist production beyond
the boundaries set by the limits of capitalism itself. What he means is that,
for the purposes of capitalist production, i.e. production for profit, by means of credit policies the
market is expanded beyond the limits set by the private ownership of the means
of production. Capitalists produce more than is required by the market. This is
due, on the one hand, to the fact that the producers of capital goods have
credit extended to them and, on the other, that through hire purchase, mortgages
and other means the consumers, too, actually purchase beyond the limits of
their levels of income. When the serious representatives of the social system
realise that this process has gone too far and threatens its very foundations,
they are compelled by economic necessity to call a halt.

Why the slump

It is not the
“obsessions” of the bankers nor the “stupidity” of the capitalists and their
representatives which cause them to act in this way. The cause lies in the
contradictions of the system itself. Macmillan, Thorneycroft, and Butler, have
declared that without the squeeze and the rise in the bank rate, the British
economy would face catastrophe, and they are right. It is true that in 1929,
and again today, these measures will precede slump. But the slump will not come because of these measures, but in spite of them
(see the article, “Slump This Year?” in Socialist
Fight. January, 1958).

These policies, both
in Britain and America, were not dictated by the industrialists and bankers,
but on the contrary were dictated to them by the state of the economy. The
reason why usually the bank rate rises before a slump is because, for the
reasons given above, credit pushes production beyond the limits of the
capitalist system. Balogh is like a doctor who reads a thermometer registering
104 deg. and prescribes…the smashing of the thermometer! The bank rate falls
during a slump for exactly the same reason that it rises beforehand. In 1929
the swift changes in the U.S. bank rate within a few months from 6 to 2 per
cent could not prevent the economic collapse.

Left Wing Socialists
have to understand that no monetary tinkering can solve the problems induced by
the inherent tendencies of the social system. From the point of view of the
working class and of the Labour Movement, neither inflation nor deflation can
serve their interests. It is a choice of death by fire or death by exposure.

“New United Front”?

What then is the
answer to the problems posed by the economic recession and the developing
slump? It must constantly be hammered home by the advanced elements in the
Movement that only the overthrow of capitalism and the establishment of a
planned economy with the nationalisation of big industry under workers’
control, can provide a final solution to these problems.

Meanwhile, as steps in
this direction, and in order to raise the level of consciousness of the workers
for this basic goal, certain transitional demands have to be put forward. No
sackings! The 40 hour week! Work or full maintenance! No collaboration between
the trade unions and the bosses, or between their representatives in
Parliament! For a sliding scale of hours! The taking over of “redundant”
concerns and their operation by the workers! Not the profits of the
capitalists, but the needs of society, must determine production!

How does the great
r-r-revolutionary, Campbell, face up to the problem of the slump? He demands
that the Labour Party must press for the ending of “all U.S imposed bans on
trading with the socialist world” (British and French imposed bans can stay,
presumably!) He is not to be outdone, in his patriotism, by any true-blue Tory.
“Why is it (the Labour Party) not insisting that the Government reach agreement
with the Dominions and colonies in the stabilisation of raw material prices?”
(Here speaks the authentic voice of the Campbell-Beaverbrook United Front). But
Campbell out-beavers the Beaver. He goes on: “And surely this is a time to be
demanding bilateral agreements between Britain and raw material producing
countries in the capitalist world other than the Dominions, ex-colonies and
colonies.”

The whole point of
this essay in jingoism is indicated by the demand for unity in forcing summit
talks. For the purpose of reaching a temporary agreement with the Soviet
bureaucracy, Campbell is prepared to prescribe for the working class some cures
that will increase the ill. He refers to the special type of medicine man, who
infest the City, “continuing to chant their abracadabra about a strong pound.”

But the abracadabra of
Campbell, the ex-Marxist medicine man, can confuse and hamper the working class
in its struggle to purge society of the evils of capitalism.